Assume That Cannon LLC Acquires a Competitor's Assets on June

Essay

Assume that Cannon LLC acquires a competitor's assets on June 15ᵗʰ of a prior year. The purchase price was $450,000. Of the amount, $196,200 is allocated to tangible assets and $253,800 is allocated to three §197 intangible assets: $153,000 to goodwill, $50,400 to a customer list with an expected life of 8 years, and $50,400 to a 3 year non-compete agreement. On May 30ᵗʰ of the second year, the customer list is sold for $10,000. (Round your amortization and final answer to the nearest whole number. Round your allocation percentage to the nearest whole percentage e.g., 0.1234 as 12%.)
1) What is Cannon's amortization expense for the second year?
2) What is the basis of the intangibles at the end of the second year?